Cells of neural origin (NG108-15) which carry opiate receptors and can be maintained indefinitely in culture are used to study the mechanism of action of morphine and morphine-like peptides (enkephalin, endorphin). These materials exert a receptor mediated dual regulation of adenylate cyclase; a rapid inhibition of activity upon which is superimposed a subsequent increase in the amount of total expressible enzyme activity. This, homeostatic, mechanism if it also occurs in brain would account for tolerance to and dependence upon the opiates which are the basic phenomena of addiction.